A CURIOUS situation surrounds Section 235 of the Income Tax Ordinance 2001 regarding electricity consumption. The law is clear and leaves no room for interpretation, yet its implementation treats it more like a suggestion than a binding rule.
The exact wording of Section 235(4) clearly states: “(a) in the case of a tax-payer other than a company, tax collected up to bill amount of three hundred and sixty thousand rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed. (b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and (c) in the case of a company, tax collected shall be adjustable against tax liability.”
The law is unambiguous in communi-cating that tax deducted under this section is adjustable beyond the specified limit. However, at the peak of the return filing season, the Federal Board of Revenue seemed to be experimenting with its system rather than ensuring smooth compliance.
On the Integrated Revenue Information System (Iris) portal, tax collected under Section 235 was shown under the fixed/final tab, when it should have rightly appeared under the adjustable tab. This was a legal and technical misclassification, causing confusion, delays and unnecessary financial complications for taxpayers who were already struggling to file their returns in a time-sensitive environment. Section 235 is meant to provide adjustment relief, not additional burdens.
The authorities should immediately fix the issue and ensure that all deductions under Section 235 are reflected in the proper adjustable category. Respecting the letter of the law builds trust. In contrast, technical errors like the one mentioned here only weaken the trust further.
Ahsan ul Haque
Karachi
Published in Dawn, October 15th, 2025
